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Afternoon Market Recap for Sept. 17, 2020

Soybeans surge higher again.

Corn and wheat contracts also stay in the green Thursday

For a second consecutive session, soybean prices carved out significant gains on extended trade optimism and lingering concerns over quality and production potential of this year’s crop. Most wheat contracts also finished Thursday’s session with double-digit gains, following overseas prices higher. Corn prices made more modest inroads, primarily on spillover strength from other grains, along with overall export optimism.

Weekend weather is expected to be extremely dry, with nearly no measurable rainfall expected for the Midwest or Plains between Friday and next Monday, per NOAA’s latest 72-hour cumulative precipitation map. NOAA’s 8-to-14-day outlook also predicts seasonally dry weather for the central U.S. between September 24 and September 30, with widespread warmer-than-normal conditions also likely.

On Wall St., volatile tech stocks turned lower again today, pushing the Dow down 254 points in afternoon trading to 27,777. Energy futures rallied higher, in contrast, with crude oil up another 2.25% to clear back above $41 per barrel for the first time since September 4. Gasoline rose nearly 3%, with diesel up almost 4%. The U.S. Dollar softened moderately.

On Wednesday, commodity funds were net buyers of all major grain contracts, including corn (+20,000), soybeans (+20,000), soymeal (+6,000), soyoil (+6,000) and CBOT wheat (+3,000).

Corn

Corn prices moved moderately higher Thursday as export optimism and spillover strength from other grains triggered some technical buying. Weekly export sales came in on the high end of trade estimates this morning, and another large flash sale to unknown destinations was also announced today. December futures picked up 3 cents to $3.7475, while March futures added 2.5 cents to $3.8350.

Corn basis bids were steady to weak Thursday, tumbling 18 cents lower at an Illinois river terminal and falling 2 to 7 cents lower at two other Midwestern locations today.

Private exporters announced to USDA the sale of 4.7 million bushels of corn for delivery to unknown destinations during the 2020/21 marketing year, which began September 1.

Corn export sales reached 63.4 million bushels last week, versus trade guesses that ranged between 31.5 million and 74.8 million bushels. Mexico and Japan have typically topped the list in these weekly reports, but China emerged as the No. 1 buyer of U.S. corn last week, with 14.2 million bushels.

Corn export shipments were more modest last week after reaching 35.5 million bushels. Mexico was the No. 1 destination, with 8.4 million bushels.

The results for Farm Futures’ latest exclusive grower survey are out, which included planting intentions for 2021. Respondents indicated they would plant 0.3% fewer corn acres next year, for a total of 91.8 million acres. They also plan to plant more than 4 million more soybean acres next year, bringing up that tally to 87.9 million acres. Click here to learn more.

Typhoons in China have hurt corn production there. Drought has plagued parts of the U.S. this summer, but that has also set the table for an easier harvest in some areas. We talked about “wild weather” and much more in the latest Midweek Markets podcast – click here to listen.

In the European Union, consultancy Strategie Grains made big cuts to its estimates for EU corn production, which fell to 2.555 billion bushels after drought hammered key production regions that include France, Italy and Romania.

Preliminary volume estimates were for 371,740 contracts, trending 54% above Wednesday’s final count of 241,301.

Soybeans

Soybean prices surged forward again today, posting gains of around 1.5%. Export optimism was refreshed on the heels of two more large export sales announced this morning, along with another strong set of weekly export data from USDA. Prices have been on a clear upward trajectory since mid-August, with a few bumps along the way. Today, November futures climbed 16.5 cents to $10.2775, with January futures rising 15.25 cents to $10.3050.

Soybean basis bids continue to see wide variability this week, moving as much as 20 cents higher at an Indiana processor while falling as much as 11 cents lower at an Illinois river terminal Thursday.

Private exporters announced two more large soybean sales to USDA today. The first was for 9.7 million bushels for delivery to China, plus another 13.2 million bushels to unknown destinations. Both sales are for delivery during the 2020/21 marketing year, which began September 1.

Soybean export sales reached 90.3 million bushels last week, which was on the higher end of trade estimates that ranged between 55.1 million and 102.9 million bushels. China nabbed over half of that total, with 54.6 million bushels.

Soybean export shipments were also solid last week, with 63.7 million bushels. China far surpassed all other destinations, taking 40.0 million bushels.

Our Feedback From The Field respondents continue to face challenges with their soybean acres this year. “We received rains the last three days that will help beans that are still green, but dry weather for the last five weeks really took a toll,” an Iowa farmer estimated. “I’m guessing at least a third of the yield is gone.” Click here to catch up on the latest batch of farmer anecdotes and view our interactive map.

Preliminary volume estimates were for 469,071 contracts, jumping substantially above Wednesday’s final count of 280,795.

Wheat

Wheat prices followed global prices higher today, leading to double-digit gains for most contracts. Spillover strength from corn and soybeans lent additional support, even as USDA’s latest export sales data was fairly lackluster. December Chicago SRW futures firmed 14.75 cents to $5.5675, December Kansas City HRW futures rose 13 cents to $4.88, and December MGEX spring wheat futures added 9.5 cents to $5.41.

Wheat export sales were relatively disappointing, falling 42% below the prior four-week average to 12.3 million bushels. That was also on the lower end of trade guesses, which ranged between 11.0 million and 25.7 million bushels. Still, cumulative totals for the 2020/21 marketing year remain 4% ahead of last year’s pace, with 281.9 million bushels.

Wheat export shipments edged 2% above the prior four-week average to 20.7 million bushels. Indonesia led all destinations with 3.3 million bushels.

Consultancy Strategie Grains upped its 2020 wheat production forecast in the European Union to 4.751 billion bushels, citing improved prospects for Poland, the Baltic region and the Czech Republic. If realized, that tally will still fall 12% below 2019 production, however, in large part to big year-over-year reductions in France.

Japan purchased 3.9 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 54% was sourced from the U.S.

Tunisia issued an international tender to purchase 3.4 million bushels of durum and soft milling wheat, plus another 3.4 million bushels of animal feed barley from optional origins, which closes tomorrow. The grain is for shipment between mid-October and mid-December.

Jordan issued a new international tender to purchase 4.4 million bushels of milling wheat from optional origins, which closes September 23. The country made an identical wheat purchase earlier this week.

South Korea purchased 1.4 million bushels of milling wheat from the United States and Canada in a tender that closed earlier this week. The grain is for arrival in early December.

Preliminary volume estimates were for 114,543 CBOT contracts, rebounding from Wednesday’s final count of 65,322.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 377.25 368 374.75 3
21-Mar 385.75 377.25 383.5 2.5
Soybeans        
20-Nov 1032.25 1005 1027.75 16.5
21-Jan 1035.25 1009.25 1030.5 15.25
Soymeal                $/ton        
20-Dec 335.9 323.4 335.3 9.5
Soyoil                    cents/lb        
20-Dec 35.19 34.67 34.86 -0.06
Wheat                    $/bushel        
20-Dec 557.25 537.25 5.56.75 14.75
21-Mar 565 546.25 564.5 13.75
KC Wheat        
20-Dec 490.5 471 488 13
21-Mar 501 482 498.75 13.25
MPLS Wheat        
20-Dec 542.75 529 541 9.5
21-Mar 554 541.75 553.75 9.75
Live Cattle             cents/lb        
20-Oct 106.95 105.925 106.775 0.05
Feeder Cattle         cents/lb        
20-Oct 142.525 140.575 141.225 -1.2
Lean Hogs             cents/lb        
20-Dec 64.05 62.45 63.75 1.775
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Oct 41.22 39.42 40.93 0.77
Diesel        
20-Oct 1.1648 1.0968 1.1584 0.0421
Unleaded Gasoline   $/gallon        
20-Oct 1.2315 1.1732 1.2225 0.0336
Natural Gas        
20-Nov 2.665 2.496 2.575 -0.089
Ethanol Futures        
20-Nov 1.345 1.29 1.345 0.05
U.S. Dollar Index        
  93.63 92.95 92.965 -0.266
Gold                      $/ounce        
20-Oct 1960.5 1930.2 1937.7 -22.5
Copper        
20-Sep 3.076 3.02 3.076 0.018
Fertilizer Swaps     (as of 9/11)  
DAP Tampa-index              342.5 3
DAP-New Orleans              395.2 -4
Urea-New Orleans              251.9 -3
Urea-Middle East              265.5 -8
Urea-Black Sea              246.5 0
UAN (32%) New Orleans              132.3 0
 
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